Statement on Trump Administration’s Latest NAFTA Announcement

December 4, 2018

Over the weekend, the Trump administration announced plans to terminate the 1993 North American Free Trade Agreement (NAFTA) to force a skeptical Congress to accept his repackaged 2.0 version.

This risky gambit is based on a faulty premise: The executive branch lacks constitutional authority to roll back NAFTA’s implementing legislation. While the president can formally terminate U.S. membership in the pact with six months’ notice, he can’t terminate the U.S.’ preferential treatment of Canadian and Mexican goods – something only Congress can change. If Trump tries to move to roll this treatment back without Congress’ buy-in, he’ll at best produce a Zombie NAFTA that lives on past death. At worst, he’ll provoke a constitutional crisis.

More importantly, NAFTA 2.0 falls far short of a sustainable and equitable trade policy. Last year when the North American re-negotiations began, the Roosevelt Institute published my report “The Sustainable and Equitable Trade Doctrine.” The report offered a roadmap for how to fundamentally rewrite the rules of the unbalanced trading regime. The doctrine had three pillars: flip the class bias of trade policy that too often protects rich monopolists while shuddering workers’ organizations, promote systemic participation by actively involving workers and grassroots organizations in building global rules for a high-road economy (instead of engaging in time-consuming country-by-country talks), and build power by reinvesting in jobs and civil society in regions hard hit by trade competition.

On each dimension, NAFTA 2.0 fails to deliver. It retains and expands upon privileges for monopolies like Facebook. It lets corporate interests like Koch Industries directly challenge government regulation, while putting vindication of the rights of labor and environmental groups at the mercy of often unsympathetic bureaucrats. Because of the administration’s handouts to the rich in last year’s tax bill, they’ve deprived the government of needed resources for a robust public investment agenda. Finally, the administration’s often belligerent treatment of our allies has distracted from the more fundamental challenges facing the global economy and institutions like the World Trade Organization.

Going forward, policymakers should focus energy on proven strategies to boost worker power and livelihoods, not sideshows like NAFTA 2.0.